Public climate concern and policy shifts: Understanding the joint impact on carbon prices in China

To effectively control greenhouse gas emissions, the carbon trading system has gained widespread attention as one of the most effective tools. This study adopts a broader perspective to analyse and compare the impacts of two societal forces — top-down climate policy changes and bottom-up public climate concern and awareness — on carbon trading prices in China. The findings disclose that top-down policy shifts and bottom-up public concern exert asymmetric effects on carbon trading prices under different market conditions, with particularly pronounced impacts in the distribution tails. The causal relationships between these forces and carbon trading prices often coincide with major climate policy changes and extreme climate events. This study underscores the importance of a dual-track approach in climate policy design, recognising that effective carbon market stability hinges on both regulatory consistency and active societal engagement.